Muse Developments has secured planning permission for an Express by Holiday Inn as part of its ongoing project to improve the Smithfield area of Manchester's trendy Northern Quarter.

Work on the hotel is expected to start on site in October and conclude in early 2011. The hotel will comprise 192 bedrooms over eight floors and sit between the existing Royal Exchange and Crowne Plaza buildings.

Mike Payton, project director at Muse, said: "The Smithfield area of Manchester has a reputation of being 'different'. The Northern Quarter is a place of creativity: music, art, design and craft – all flourishing within this compact network of intriguing streets. The development will be in keeping with this attitude by remaining sympathetic to the existing character.

"The scheme is another piece in the jigsaw where mainstream buildings complement independent occupiers. We are proud to be able to enhance the neighbourhood."

The scheme will include a 14,000 sq ft public square. Payton added: "Smithfield was largely impenetrable so the new Smithfield Square will improve access from the north and south. It will enliven and enhance the area."

Muse and joint venture partner Crosby Homes have delivered 318 apartments in three phases at Smithfield since 2001. There are also offices, galleries, shops and cafes at ground floor level. The Crowne Plaza was completed last year.

The next phase of the scheme will see the overhaul of the listed Mackie Mayor building in Shudehill. Manchester City Council and Muse Developments are currently assessing ways of bringing the 1870s building back to life.

"We intend to give the Mackie Mayor building a facelift," said Payton. "It is a fascinating structure and we will retain its features in our plans."